Blue Chip Issue 89

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BLUE CHIP PRACTICE MANAGEMENT | Technology Technology innovation: the one thing that changes everything in an onerous regulatory environment As South African financial services providers (FSPs) prepare for the promulgation of the Conduct of Financial Institutions (COFI) Act in the next year or so, some of the leading FSPs are already in the initial exploratory stages to establish how COFI will impact the efficiencies in their businesses. The quest for business efficiencies is, and will remain, an ongoing process especially as regulatory reform continues. Few advisors, if any, will argue that technology plays an essential part in managing an effective, efficient and profitable business. In this article, we will only focus on the significance of technology innovation and the impact that it will continue to have on FSPs as we brace ourselves for COFI. During a recent Trusted Advisor survey, advisors were asked whether we are over-regulated as an industry and, given the current regulatory obligations and other factors impacting advisors and intermediaries, providing advice has become extremely challenging and increasingly difficult to do business profitably. Eighty-seven percent (87%) of advisors agreed. Regulatory reform may be well-intended, but it is an undeniable fact that legislation has brought with it complexity, additional administration and significant costs to financial advisory businesses over the last two decades. Regulatory reform started in 2001 when the Financial Intelligence Centre Act (FICA) was introduced, and shortly thereafter the Financial Advisory and Intermediary Services (FAIS) Act was implemented in 2004, and it was clear that legislation was here to stay. These laws added more requirements, more paperwork and administration and put further pressure on the advisor/client experience. More recently, the Protection of Personal Information Act (POPIA) added yet another layer of legislation and administration, which further exacerbated the process. As stated at the outset, it cannot be denied that the volumes, complexity and exacting nature of the legislation that applies to advisors and intermediaries puts a tremendous administrative burden on financial services providers. In this complex, admin intensive and exigent environment, FSPs need something that will help them to not only survive in the industry but to stay at the cutting edge of the profession. When there are only 24 hours in a day to do business and administration, and there are more things to do due to more legislation, logically, you will have to do things faster and more efficiently if you want to finish the work at the same time. At the risk of stating the obvious, if you do not want to employ more people to do the additional work, the only logical solution is to use technology effectively. With the COFI Act on its way in the next year or so, technology innovation is going to be more important than ever. COFI will replace the FAIS Act and it will have a ripple effect throughout every component of FSP businesses. With these changes, every FSP business will need an equaliser – a tool that can simplify the complexity of doing business, and automate business and compliance processes, whereby the effectiveness and efficiencies in the business are enhanced. Without it, FSPs will find it increasingly difficult, if not impossible to stay in business and meet their requirements. Fortunately, leading financial planning and CRM software companies are aware of this dilemma that FSPs are facing, and it offers great business opportunities for them to add tremendous value to their FSP clients. The leadership of business software solutions like Elite Wealth, Avalon and atWORK recognise that there are many components in the business of FSPs where they can make a significant contribution to enhance business processes and efficiencies. For them, it will be helpful to know that the underlying components of all FSP businesses can be illustrated as follows: S U I T A B I L I T Y Representatives / Supervisor / KI The 10-Step Process Prospecting Set up appointment Professional introduction Gather information Agree on services Conduct an analysis & prepare report Present the proposal Agree on production solution Implement the solution Ongoing advice & services Income / Remuneration R E C O R D K E E P I N G Culture & Governance P O L I C I E S Principal / Key Individual Business Management People Training Business infrastructure Processes & systems Marketing Risk management & compliance Administration Remuneration Financial management Income / Remuneration Directors / Principals / Managers / Key Individual FSP Reporting FIC Prudential Authority Information Regulator Financial Sector Conduct Authority South African Revenue Service Profit growth Increased shareholder value Client experience Source: The fundamentals of practice management for representatives This illustration identifies all the essential underlying components of every single FSP, not only in South Africa but globally. Client engagement (column on the left) is the heartbeat of every FSP as it is during this process that clients are acquired and retained in the business. It is also from this process that revenue is earned. P R O C E D U R E S 62 www.bluechipdigital.co.za
PRACTICE MANAGEMENT | Technology BLUE CHIP Professional client engagement is a process and through technology, many of these steps can be automated from an administrative point of view. Client engagement has two essential components that cannot be separated, namely best business practice aimed at building client trust, and compliance aimed at confirming suitable advice and keeping accurate records of advice and transactions. Best practice principles and compliance are inseparable and must be integrated to ensure consistent and efficient application. The 10-step process of professional client engagement is one of the most important processes for software and CRM companies to capture in a workflow. Advisor and client information must be prepopulated in compliance templates to save time, and automation is essential to enhance efficiencies and consistency in the process. Ideally, the FICA process and the POPIA requirements should also be integrated into the process and automated as far as possible. Prepopulating information, automation and even digitalisation will go a long way to enhance the advisor and client experience during the client engagement process, which will give real substance to the FSP’s value proposition. Technology is not only a game changer in the client engagement process. It can play a significant part in every component of the business, such as HR, training, systems, processes, marketing, compliance and financial management, etc. For example: COFI will be introducing a Conduct of Business Return (Omni-CBR), like the former compliance report that had to be submitted to the Financial Services Board a few years ago, but the Omni-CBR is going to be an FSP compliance report on steroids. I have conducted a high-level analysis of the proposed return and it did not take me long to realise that it is going to be impossible for FSPs to submit this report effectively and efficiently without the help of technology. There is no doubt in my mind that FSPs will become increasingly dependent on technology innovation by software and CRM businesses to absorb the additional burden of administration. This is one of the reasons why this topic will be discussed during the 2023 FPI Convention on the 14th and 15th of November at the Sandton Convention Centre. Anton Swanepoel, Founder, Trusted Advisor If you do not want to employ more people to do the additional work, the only logical solution is to use technology effectively. www.bluechipdigital.co.za 63
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BLUE CHIP 0.5 CONTINUOUS PROFESSION
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CONTENTS ISSUE 89 NOV/DEC/JAN 2024
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CONTENTS ISSUE 89 NOV/DEC/JAN 2024
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BLUE CHIP FPI UPDATES | CEO message
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BLUE CHIP On the money Making waves
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BLUE CHIP On the money Making waves
Page 15 and 16: RCA-BCJ-23-2 Our tailored platform
Page 17 and 18: BEHAVIOURAL FINANCE | Books BLUE CH
Page 19 and 20: COLUMN BLUE CHIP Consider paying of
Page 21 and 22: FPI | Financial Planner of the Year
Page 24 and 25: BLUE CHIP FPI | Research The power
Page 26 and 27: BLUE CHIP FPI | Research • 84% ag
Page 28 and 29: BLUE CHIP CLIENT ENGAGEMENT | Behav
Page 30 and 31: BLUE CHIP CLIENT ENGAGEMENT | Behav
Page 32: BLUE CHIP CLIENT ENGAGEMENT | Behav
Page 35 and 36: INVESTMENT | Offshore BLUE CHIP The
Page 37 and 38: INVESTMENT | Economy BLUE CHIP 1% o
Page 39 and 40: INVESTMENT | Asset management BLUE
Page 41 and 42: Partner with us, become an FPI Appr
Page 43 and 44: MAKE YOUR MONEY WORK ANYWHERE. At O
Page 45 and 46: INVESTMENT | Economy BLUE CHIP Thin
Page 47 and 48: FINANCIAL PLANNING | DFM BLUE CHIP
Page 49 and 50: Calling ALL Financial Advisors Bran
Page 51 and 52: Help us create a better tomorrow. I
Page 53 and 54: ROUND TABLE SERIES | Offshore inves
Page 55 and 56: FINANCIAL PLANNING | Self developme
Page 57 and 58: PRACTICE MANAGEMENT | Technology BL
Page 59 and 60: USE AI FOR EFFORTLESS AGENDAS & MIN
Page 61 and 62: FINANCIAL PLANNING | Technology BLU
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Page 68 and 69: BLUE CHIP PRACTICE MANAGEMENT | Tec
Page 70 and 71: BLUE CHIP CLIENT ENGAGEMENT | Commu
Page 72 and 73: BLUE CHIP FINANCIAL PLANNING | Reti
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Page 77 and 78: FINANCIAL PLANNING | Retirement BLU
Page 79 and 80: PRACTICE MANAGEMENT | Accounting BL
Page 81 and 82: GOALS BASED ASSET MANAGEMENT HEALTH
Page 83 and 84: FINANCIAL PLANNING | Retirement BLU
Page 85 and 86: FINANCIAL PLANNING | Leadership BLU
Page 87 and 88: CLIENT ENGAGEMENT | Behavioural fin
Page 89 and 90: PRACTICE MANAGEMENT | Business deve
Page 91: YOU SHOULD THINK CAREFULLY ABOUT TH
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Blue Chip Issue 89

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